Aiding the Drug Cartels

The bank will pay a $160 million penalty to settle money laundering charges, acknowledging misbehavior that Barron's highlighted in 2009.

PROSECUTORS IN MIAMI ANNOUNCED $160 million in money-laundering penalties against Wachovia Bank on Wednesday, the largest penalty ever obtained under federal anti-money-laundering laws. The bank acknowledged its failure to adequately monitor the billions of dollars it processed for Mexican currency-exchange houses between 2004 and 2007, a money flow including at least $110 million of narcotics proceeds from Mexican drug cartels. The Justice Department agreed not to prosecute Wachovia as long as regulators see continued compliance and cooperation from the bank—once the nation's fourth largest and now part of Wells...